It is safe to say that offshore bookkeeping services is seen as a viable option not just by big corporations but even by small and mid-size firms. Medium sized firms and start-ups tend to benefit from the time and money they can save when they outsource bookkeeping services to India. In the last five years, growing use of cloud computing, increased awareness and falling cost of communication has led to a rise in the demand to outsource accounting services to India and other countries.
Bookkeepers are essentially responsible for entering data in the books and keeping their records up to date. Tracking of all income and expenses, paying bills, invoicing, tracking payrolls and other related tasks are all performed by a designated bookkeeper. If you are wondering what difference it really makes when these services are provided by an outsourced team and how that affects your day-to-day functioning, we will share a few key points that will answer all your questions.
- Cost savings – It is a well-known fact that outsourcing helps save up to 40-70% as it provides you the option to hire resources or a team at a reasonable cost. When you hire an online accountant, you can get all the services from him/her that you would expect an in-house employee to perform.
- No overheads - It takes away a major chunk of your expense that goes into maintaining an in-house team, providing work space and other amenities. When you hire bookkeepers that are working for you remotely, you have the option of scaling up and down as per your requirement. The outsourced service provider usually deals with the resource management to provide undisrupted services.
- Focus on core business – Outsourcing allows you to strengthen your skills and focus on your core business strategies in two ways. Firstly, it leaves a lot of time and room for your in-house team to focus on other tasks that are growth-oriented such as expanding clientele, maintaining and retaining business relations, etc. Secondly, an expert accountant can also provide you with information and reports that reflect how your business is performing in terms of cash flow in order to help you recognize the areas that require your focus.
- Expertise – A skilled resource or team will be available to perform the accounting tasks for your firm. They have the training, experience and dedication that is required to perform these sensitive tasks - like managing your accounts with utmost care.
- Good processes - An outsourced service provider assures quality processing and understands the importance of this in accounting. It saves time and helps avoid any confusion when the work is done accurately and with precision.
A bigger talent pool to choose from, the availability of flexible paying options and excellent communication skills are some of the other key factors that make outsourcing of accounting services an attractive and successful option today. However, it is imperative that you maintain a healthy relationship with the outsourced accounting firm you wish to hire. It is the only way to ensure you can transfer some of your confidential data and information to a foreign team without any hesitation. Good rapport also contributes towards building a long-term relationship between the firm and outsourcing service provider based offshore.
So what can you do to create a successful relationship with an outsourced accounting service provider?
Here are a few simple yet impactful ways to achieve this:
- Clarify your needs – This needs to done at the very beginning of your contract, if possible. You must communicate what your expectations and top priorities are. Your outsourced team will then know the kind of deliverables and reports you expect from them in order to make more informed decisions for your business. Not just that, this onboarding phase is also ideal for firms to open up about the current state of their accounts. This is a crucial step and needs to be performed with sincerity and honesty to receive positive results. The idea is for both parties to understand their respective goals as well as the direction they need to head towards.
- Establish communication – It goes without saying that strong and regular exchange of communication is imperative for this model to work successfully. It allows regular check-ins, lets the accounting team feel included in the overall business growth and provides a platform for all members to exchange feedback and ideas.
- Well defined roles and responsibilities – Once you have the outsourced team you wish to hire, you will need to determine what duties you need them to perform. Each firm works in a unique way and has different lifecycles in terms of maintaining and evaluating accounts. It is important that your offshore team is informed of their responsibilities and the roles they are expected to perform.
- Stay informed about your financials - To see some major transformations in your business, you need to stay informed and aware of all your financials. It is indeed your bookkeeper’s job to maintain all records but it is for you to check those from time to time and make decisions accordingly. Both financial reporting and management reporting help you make changes at the internal and external levels to enhance growth.
- Become more strategic – You can make the most of the management reports provided to you when you outsource accounting to India. Management accounting provides you with financial intelligence that enables data driven business decisions. The expertise of your outsourced resources along with the trust you put in them can pay off when used strategically.
- Right pricing structure – Outsourced service providers usually offer a flexible pricing option. If the volume of work is consistent, then choosing a flat fee package or a dedicated option works well. On the other hand, if there are short-term assignments, then hourly rates work well.
- Pilot or trial project – It is always great to start off with a new team of employees by assigning them a trial project. Since there is a lot of anticipation at both ends, beginning on a trial basis proves to be a safe option. It helps the two parties build a relationship with one another. It also allows the outside firms to actually experience the quality of service on offer before they make a long-term commitment.
- Termination procedure - The termination clause should be clearly stated in the contract. It becomes essential when you are not satisfied with the level of services provided by the vendor. You must follow the standard industry practice of a 30/60-day notice period before you can actually terminate your contract. Make sure your vendor agrees to transfer all files back to you and is willing to participate in the handover process.